Building Home. Eric John Abrahamson
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The Depression brought new players and techniques to home construction. A handful of pioneers experimented with the idea of prefabricated homes. Foster Gunnison, who launched Gunnison Magic Homes, adapted the newly developed waterproof, plywood, stressed-skin panel created by the U.S. Forest Products Laboratory to make standardized wall panels. Gunnison offered prefabricated model homes for different income groups and hoped to become the “Henry Ford of housing.” Unfortunately, according to historian David Hounshell, “all of his houses looked very much alike, and they did not satisfy the idiosyncratic, highly personalized tastes of the American home buyer.”29
In the West, innovators focused more on streamlining construction. On the Colorado River, the Six Companies, which included Henry J. Kaiser as a partner, pioneered in situ mass-production techniques when they built the Hoover Dam and housing for workers in Boulder City in the early 1930s. They later adapted these techniques to revolutionize the process of wartime shipbuilding and housing construction.30 Meanwhile, planners and builders working for the Farm Security Administration in California developed new strategies for low-cost housing construction to meet the needs of migrant workers.31
With defense mobilization, the federal government began to finance the construction of new facilities to make tanks, airplanes, and ships. To shelter this workforce, Congress authorized the construction of seven hundred thousand public housing units in key defense industry communities, including Southern California.32 Given the urgency of the situation, Congress and federal policy makers expected that these units would be built by large-scale contractors, like Kaiser, who had political connections and extensive experience with federal projects.33
Traditional home builders feared that they would go out of business if these large contractors won all the government work. Traveling around the country to talk to contractors, Howard Ahmanson's friend Fritz Burns helped to organize the Home Builders Emergency Committee. Their lobbying effort paid off when Congress passed Title VI of the Housing Act in March 1941. The new law offered builders direct, guaranteed loans of up to 90 percent for the construction of homes in 146 industrial areas that were deemed to be critical to the nation's defense. The success of this effort led to the creation of the National Association of Home Builders in 1942 and Burns's election as the association's president.34 It also helped put Los Angeles at the forefront of mass production in home construction as Burns and other builders erected some of the first low-cost, mass-produced tract homes in communities like Westside Village in Mar Vista, Toluca Wood in North Hollywood, and suburban Westchester near aircraft manufacturing facilities owned by Douglas Aircraft, Lockheed, and North American Aviation.35
With the end of the war, many people anticipated that “better and less expensive homes would be coming off assembly lines by the thousands.”36 Only days after the Nazi surrender in Germany in May 1945, Kaiser announced plans to build ten thousand low-cost homes on the West Coast as soon as war restrictions on building materials were lifted. Fritz Burns would serve as president of the newly organized Kaiser Community Homes.37
Kaiser and Burns represented a new kind of home builder.38 In Los Angeles, New York, and other major urban areas, these “minor Henry Fords,” described as “operative” or “merchant” builders, developed assembly lines on the job site and used mass-production strategies to cut costs even below the prefabricators.39 Employing vertical integration strategies to manufacture many of their building materials and preassemble components, they constructed hundreds of homes at a time. At the Kaiser plant in Los Angeles, floor and wall sections were made in the factory, along with ceilings and cabinets. Workers prepainted in spray booths before these components were trucked to the job site.40
The operative builders also adapted the multidivisional structure of the corporate world to keep subcontractors engaged full time. These subcontractors learned the builders’ systems and provided continuity from tract to tract. These subcontractors didn't have to bid on jobs. Instead, they were offered negotiated fees. In essence, they operated as divisional managers, but they had a financial stake in the success of the project.41
With new materials, assembly-line production, and new labor arrangements, tract home builders cut construction costs dramatically. On Long Island in 1947, William Levitt built homes for around seven dollars per square foot at a time when most metropolitan builders incurred costs between ten and fifteen dollars per square foot for non-custom-built homes.42 By 1955, three out of four houses under construction in metropolitan America were being built in housing tracts. In Southern California, the sound of carpenters hammering housing frames together rang out in new bedroom communities in the San Gabriel and San Fernando valleys and along the path from downtown Los Angeles to the coast.
As developers and builders rushed to meet the demand for these affordable single-family homes, the scale of these new projects increased dramatically. Kaiser pledged to build a hundred thousand homes—fifty times the number that Fritz Burns had constructed during World War II, when he was one of the nation's most productive home builders.43 In just two years, between September 1, 1946, and September 1, 1948, Kaiser Community Homes made an aggressive start on this goal by erecting 5,319 homes in the Los Angeles metropolitan area, including 1,295 in Westchester, 562 in Monterey Park, 471 in Ontario, 430 in Compton, and 300 in Westside Terrace.44 In 1947, Kaiser Community Homes developed plans to build a new “City within a City” on the Panorama Ranch in the San Fernando Valley, complete with homes, factories, and shopping centers for “living, work and play.”45
At Lakewood, developer Louis H. Boyar bought 3,375 acres of farmland near Long Beach. With builders Mark Taper and Ben Weingart, he began planning a community of seventy thousand people housed in 17,500 homes.46 Located only a short commute from jobs at Douglas Aircraft and at the port, the project attracted twenty-five thousand people on the day the sales office opened to the public.47 At the height of construction, Taper and Weingart and their crews built fifty houses a day.48
Construction at Panorama City and Lakewood reflected only the most dramatic aspects of an unprecedented building boom in Los Angeles. Throughout the region, other builders and developers launched projects ranging from a few dozen to several hundred new homes. During the five years that followed the Japanese surrender, 327,598 new single-family homes were built in Los Angeles County alone, increasing the overall stock of homes by 45 percent. Few other metropolitan regions in the country rivaled this production.49
None of these new homes would have been possible without construction loans and mortgage capital. But many lenders were intimidated by the risks associated with large projects. Prior to 1938, for example, when Fritz Burns experimented with mass production at Westside Village, no subdivision developer or builder in Southern California had ever received a construction loan for more than 40 units, much less the 788 that Burns proposed to build.50 With the end of the war, builders rushed to follow in Burns's footsteps, but finding lenders to back them remained a challenge. In this situation, Howard Ahmanson recognized a major opportunity.
HOWARD ENTERS THE BUSINESS
Charlie Fletcher wanted to talk politics. He was running for Congress in September 1946, and Howard ostensibly was his campaign manager. With two months left before the election, they had lunch together at the Stock Exchange Club in the